As we say goodbye to 2021 and hello to 2022, many Canadians are wondering what the real estate market has in store for the next year. 

To say that 2021 was a whirlwind year would be an understatement. The year was marked by record sales numbers, record-low inventory, and record price increases. It was one of the strongest seller’s markets we’ve seen in recent years. 

The continued effects of the pandemic drove the real estate market in 2021, and it will be interesting to see its lasting impact into the next year. 

With that said, here’s a look at a few things we know for sure about Canada’s real estate market in 2022 and how it might impact real estate in Hamilton. 

It Will Still be a Seller’s Market

One of the biggest reasons for the current competitive seller’s market is the lack of inventory. Simply put, there aren’t enough homes available to satisfy the demand of people wanting to buy them. Experts predict that this trend will continue into the next several months at least, meaning it will still be a great time for sellers to list their homes. 

Buyers, on the other hand, will need to contend with increased competition and will need to continue to be flexible and assertive in their approach to buying a home. 

Interest Rates Are Going Up 

As a measure to protect the Canadian economy during the pandemic, the Bank of Canada initially lowered the benchmark interest rate. This was one of the events that spurred the initial housing boom as a result of the pandemic back in 2020. 

However, the central bank has deemed it safe to begin increasing the benchmark interest rate again back to normal levels. Although we can’t say for sure exactly when the hikes will come, many analysts and experts from Canada’s “Big 6” banks are predicting at least four increases to happen in 2022. 

The first of which is predicted in March of 2022 followed by three smaller hikes over the rest of the year. 

For anyone seeking or refinancing a mortgage, this means that they will need to deal with a higher interest rate than seen in the past two years. First-time buyers looking to enter the market would be wise to get their mortgage rate locked in with a pre-approval right now before the rates go up in the spring. 

Are you a first-time homebuyer? Read our blog to find out what you need to know about the first-time homebuyer incentive here.

Prices Are Also Expected to Rise

Along with the interest rates, experts predict that the trend of rising house prices will persist throughout 2022. Although the rate at which prices are rising should slow compared to 2021, thanks to the new interest rate increases, we still expect to see year-over-year increases in prices. 

We Might See Some of The Liberal Party’s Plans Come to Fruition 

Justin Trudeau and the Liberal Party made a lot of housing promises on the campaign trail in the fall of 2021. While their housing platform was not the most aggressive out of the big parties, we still might see some of their ideas make an impact on housing in 2022. 

For example, policies such as doubling the first-time homebuyers’ tax credit, creating rent-to-own programs, and banning the sale of homes to foreign nationals might have some impact on how the real estate market operates. 

Other policies like introducing a buyer’s bill of rights and a proposed anti-flipping tax only serve to further protect the interests of Canadians wanting to buy in today’s market. 

However, most experts agree that the most compelling platform promise in the Liberal’s housing plan is the Housing Accelerator. Many analysts believe that the only way to truly overcome Canada’s housing crisis is to build more housing. The Housing Accelerator Fund will help all levels of government collaborate together to grow the housing supply faster and more affordably. 

If you’d like to learn more about the Liberal housing plan, you can read our blog about it right here.

The Condo Market Will Return to Normal 

At the onset of the pandemic, many urban cities noticed a mass migration of people into the suburbs and more rural areas. The work from home movement made a lot of people realize that living in close quarters in a downtown condo was not ideal for their quality of life. 

As more people left the city and moved into smaller surrounding towns, the condo market saw a significant decline. However, as pandemic recovery continues to move forward and cities have opened back up with more professionals heading back into offices, we have seen the condo market stabilize and even grow. 

For investors, 2022 is a great time to invest in a condo as many professionals will be seeking new condo rentals this year. Condo sales are strong month-over-month and prices remain stable, making the condo market a viable option for investors, first-time buyers, and downsizers alike. 

The Suburbs Will Remain Popular

Although the condo market will get back to normal and many young professionals will choose to stay close to urban centres, we will still see more suburban towns gain popularity with buyers. Many professionals chose to remain working from home and now value space more than they value proximity to urban amenities. 

Additionally, buyers are taking note of the different property value outside of urban centres like Toronto, with cities like Hamilton becoming more popular among young buyers due to their affordability relative to that of other parts of the GTA. 

Although we probably won’t see another mass migration as we did at the start of the pandemic, there will still most likely be a steady stream of buyers choosing to relocate out of the city. 

At Michael St. Jean Realty, we are your trusted Hamilton realty experts, if you have a question about buying or selling your home, call us at 1-844-484-SOLD or email us here.